![]() ![]() ![]() However, sometimes, we may need to make the payment in advance for the advertising service. And at the end of the month, we will usually see how much we have spent on advertising based on the pay-per-click model and make the journal entry for advertising expense accordingly. This means we will only pay when the target audiences click on our advertising text or banner. We may see this type of transaction on online advertising as it usually operates the pay per click model or PPC which is common in many online platforms. This journal entry is usually made when our company incurs the advertising expense at the same period of the cash outflow from the business. We can make the advertising expense journal entry by debiting the advertising expense account and crediting the cash account. This is due to, following the accrual basis of accounting, we should only record an expense when it actually occurs regardless of when we have made the cash payment. In this case, we need to record it as an asset on the balance sheet first and we can only recognize it as an expense when our products are displayed on that advertising platform. For example, we may need to make a three-month advance payment in order to have our products displayed on a certain advertising platform in the next three months. Journal entry for advertising expense may involve prepaid expense in which we need to make an advance payment for the advertising agent or advertising company before we can receive an advertising service. Likewise, we may need to make the advertising expense journal entry many times during the accounting period. In business, we may need to make advertisements on different types of platforms in order to make our products or services known to the public as well as to increase the sales in our business. Advertising Expense Journal Entry Introduction ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |